How to Start an Art or Illustration Business in the UK

Turning your art or illustration work into a business is exciting — but the admin side can feel overwhelming if you have never dealt with tax returns and business expenses before. The good news is that it is simpler than you might think.

This guide covers everything you need to know to get your creative business set up properly in the UK.

When Does a Hobby Become a Business?

HMRC draws a line between a hobby and a business. If you are regularly selling artwork, taking commissions, or licensing your illustrations with the intention of making a profit, you are running a business and need to register.

Occasional sales at a craft fair do not necessarily make you a business. But if you are actively marketing your work, investing in materials, and treating it as an income source, you should register.

The trading allowance gives you £1,000 of tax-free trading income per year. If your total income from art and illustration is below this, you do not need to register. Above it, you do.

Sole Trader or Limited Company?

The vast majority of artists and illustrators start as sole traders. It is the simplest and cheapest option. You register with HMRC, keep records of your income and expenses, and file a Self Assessment tax return each year.

A limited company only starts to make financial sense when your profits are consistently above £40,000–£50,000. For most artists, sole trader status works perfectly well for years.

If you collaborate regularly with another artist, you could form a partnership, but this adds complexity. Keep it simple to start with.

Registering with HMRC

Register for Self Assessment within three months of starting your business. You can do this online at GOV.UK. HMRC will send you a UTR (Unique Taxpayer Reference) by post, usually within 10 working days.

You will also be registered for Class 2 and Class 4 National Insurance contributions, which are calculated as part of your Self Assessment.

VAT registration is required if your turnover exceeds £90,000. Most artists will not hit this threshold, but if you do, you must register.

Claimable Expenses

This is where many artists miss out. You can deduct legitimate business expenses from your income before calculating your tax. Common expenses for artists and illustrators include:

• Art materials — paints, canvases, paper, ink, brushes, pencils, and any other supplies
• Digital tools — drawing tablets, styluses, computers, monitors
• Software subscriptions — Adobe Creative Suite, Procreate, Clip Studio Paint, and similar
• Printing costs — giclée prints, business cards, promotional materials
• Website and portfolio hosting
• Home studio costs — either the simplified flat rate (£6 per week) or a proportion of actual household costs
• Exhibition costs — stand hire, framing, transport of artwork
• Postage and packaging — for shipping artwork to buyers
• Photography — having your work professionally photographed
• Travel — to galleries, exhibitions, client meetings, or events (at 45p per mile for the first 10,000 miles)
• Training and workshops — courses that develop your existing skills
• Agent or gallery commissions — fees paid to agents or galleries who sell your work
• Marketing and advertising — social media promotion, online listings

Keep every receipt. Accounted lets you snap a photo of each receipt and automatically matches it to your bank transactions — no more shoeboxes of crumpled paper.

Industry-Specific Tax Rules

Artists' Averaging

One of the most useful tax provisions for artists is profit averaging. If your income fluctuates significantly from year to year — which is common for artists — you can average your profits over two consecutive tax years. This can reduce your overall tax bill if you have one very profitable year followed by a quiet one.

To qualify, your profits in the lower year must be less than 75% of the higher year. Your accountant or tax software can help you work out whether this applies.

Royalties and Licensing Income

If you license your artwork — for example, selling designs for use on products, in publications, or as stock illustrations — this income is treated as trading income and included in your Self Assessment.

If you receive royalties from a publisher, they may deduct tax at source. You can claim credit for this on your tax return to avoid paying twice.

Selling Original Artwork

Sales of original artwork are trading income. However, if you sell a piece from your personal collection that you created years ago and never intended to sell as part of your business, it could potentially be treated as a capital gain instead. In practice, HMRC usually treats regular sales as trading income.

Artist's Resale Right (Droit de Suite)

If your original artwork is resold through an art market professional (gallery, auction house) for €1,000 or more, you are entitled to a royalty of up to 4%. This is not a tax — it is additional income you are owed, and it should be included in your tax return.

Insurance

While not legally required for most artists, insurance is worth considering:

• Public liability insurance — essential if you exhibit at fairs, galleries, or run workshops
• Product liability insurance — if you sell physical products
• Contents insurance — for your studio equipment and stock
• Professional indemnity — if you take commissions and a client disputes the result

Policies specifically designed for artists and makers are available from specialist insurers and typically cost £100–£300 per year.

Selling Your Work

There are more ways to sell art and illustration than ever:

• Your own website — using Shopify, Squarespace, or a simple portfolio with a shop
• Etsy and other marketplaces — good for prints and crafts
• Galleries — both physical and online
• Commissions — directly from clients
• Licensing — selling the right to use your designs commercially
• Stock illustration sites — passive income from uploaded work
• Art fairs and markets — direct sales and networking

Each channel has different costs and margins. Track your income by source so you know what is actually profitable.

Bookkeeping Tips for Creatives

Many artists dread the financial side. A few simple habits make it painless:

• Separate your personal and business spending — open a business bank account
• Record income and expenses as they happen — do not leave it until January
• Categorise everything — materials, software, travel, and marketing should each have their own category
• Set aside money for tax — put 25–30% of your profits into a savings account each month
• Invoice promptly — for commissions and licensing work, send invoices as soon as the work is delivered

Accounted is designed for exactly this. It connects to your bank, categorises your spending with AI, and keeps everything organised for your tax return.

Key Deadlines

• 31 January — Self Assessment tax return and payment deadline
• 31 July — second payment on account
• 5 April — end of the tax year

Getting Started

You do not need permission to start selling your art. Register with HMRC, keep proper records, and claim the expenses you are entitled to. The financial side does not have to be complicated.

Ready to take the admin out of your art business? Sign up for Accounted and let Penny, our AI bookkeeper, keep your finances sorted so you can focus on creating.